How does iCloud work?

iCloud seems to confuse a lot of users. They ask: What happens in the background? Which thinking-paradigms can you use to understand the iCloud? Why does it “just work”?
In this screencast we try to explain iCloud’s features separately so you can use it more effectively. This is not one another fancy tech-demo showing you that iCloud works. We rather focus on the understanding of how does iCloud work?